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Making a million

Updated: Aug 28, 2019

Located at the gateway to some of Scotland’s top outdoor destinations, The Real Food Cafe in Tyndrum, Perthshire, should, traditionally, be a seasonal business. However, by marketing to new groups of potential customers, winning awards and investing back, owner Sarah Heward has created a fish and chip business that is busy all-year with a turnover approaching £1.5 million

How did The Real Food Cafe come about? I was managing director for Corney & Barrow in the City of London, a post I’d held for over a decade and, as I was approaching 40, I decided it was time to start my own business. Initially, I thought about opening a pub in London, but I couldn’t find a suitable site. When I saw an advert for a Little Chef for sale freehold in Tyndrum in Scotland, it seemed like a good opportunity given that I owned a holiday cottage nearby. Starting our business in April 2005 in a sad, derelict building on the A82 certainly hadn’t been the original plan, however when the bank manager said if we opened a fish and chip shop in Tyndrum ‘we wouldn’t go wrong’ it seemed like advice that we couldn’t ignore!

What made you think you could succeed where a major chain failed? The business has been built with quality as one of its cornerstones throughout all aspects of the operation from food sourcing to team recruitment and development, premises and equipment. We do not pay lip service to our values and we continually invest in the business, always seeking to improve and evolve and never resting on our laurels. We have targeted our marketing to specialist user groups very successfully, ensuring it has been a case of ‘inch wide, mile deep’ rather than a ‘scattergun’ approach and, in doing so, we have maximised our return on investment in this area.

What were your biggest challenges when starting out? I opened the café with my late husband Steve and when he passed away very suddenly just over a year later, it was a devastating blow to me. Not only did I lose my husband, but I lost my trusted business partner. The café then suffered a spate of vandalism and I discovered I was being defrauded by an employee and I ended up in a lengthy tribunal dispute with another. I just didn’t know at that point if I could go on with the business – it felt like too much of a responsibility. When I hit rock bottom, I realised I had to ask for help, which I did with great success from various sources. I then met Alan McColm who later became my husband and that’s when I began to turn a corner. He supported me both emotionally and with the business and he’s become my mentor, working to develop our team and deal with all the behind-the-scenes tasks. In hindsight, what doesn’t kill you makes you stronger and I’m glad I’ve managed to fight through adversity to create the successful business we run today.

How has the business grown? When the café first opened it had just six employees plus myself and my late husband. Now we have a team of 19 which climbs to 28 when we bring in seasonal workers over the summer months. Our turnover today is approaching £1.5m and we serve 200,000 customers a year. We are open seven days a week for breakfast, lunch and dinner and we only close for four days a year! We continually invest back into the business, we’ve won many awards both locally and nationally and, since opening, we’ve created a 55-cover extension, opened a ‘Grab & Go’ kiosk, bought a specially made and fitted out food production kitchen. We continue to innovate and update our menu and services too.

That’s quite impressive for a seasonal business? Like many tourism businesses in Scotland, we are busier during the summer months, however ‘the season’ is extending every year and we now do not have any days when we register sales of under £1,000. We are a popular dining option for the small local community in and around Tyndrum because we are supportive of community activities and events and have been since opening. We are also popular with regular commuters who now plan their journeys around stopping at the café, knowing that we are reliably open all year round for long hours and that we stick to these hours.

By opening for breakfast, we have attracted people who stop and enjoy their breakfast to return and try us for lunch or dinner. Being based in a national park and because of our targeted marketing, we attract many outdoor enthusiasts – from walkers to runners to cyclists - who know we have good quality food and that we’ll be open. We’re also dog-friendly so we get lots of dog lovers planning their journeys to stop and eat with us. This year we are also looking to introduce some special offers for snowsports enthusiasts passing through on the way to Glencoe and the Nevis range.

Where in the business are you seeing the biggest growth? The growth in sales is coming largely from hot drinks and home baking, breakfast, vegan, vegetarian and free from foods. The customers are demanding more variety and a broader range of menu items as well as high quality and affordable prices. One of our strengths has been our ability to keep at the front of changing trends and innovate, adapt and develop. We make considered plans and produce budgets and stick to them for a given amount of time before we amend them, avoiding knee-jerk reactions and instead testing things thoroughly.

What are your biggest challenges now? Probably the uncertainty around what’s going to happen post-Brexit given that a number of our employees are European and what may happen in the wider economy with discretionary spend and inflation. The rising cost of ingredients is also having an impact. The 20% VAT rate is a real challenge for businesses like ours, and then there’s the threat of large fines for late payments. I’d like to see a rate for food service businesses more in line with Ireland’s 5% VAT. As a medium-sized player, you really are squeezed on prices, margins and for market share between very small businesses which tend not to pay any VAT and the very large ones who have the advantage of substantial purchasing power and marketing muscle.

How are you dealing with the rising costs? We have put our prices up, across the board. Being afraid to charge the right prices can be a disastrous strategy. We believe that there should be some resistance to prices from your customers otherwise you are probably undercharging. We have been working on improving portion control, reducing wastage and tighter stock control.

Is there room for more growth? Our strategy has been, and continues to be, to build a quality product and operation focusing on the detail and delivering more profit through growth and greater efficiency. We are marketing to new groups of potential customers, investing in training and pushing for more awards because they help validate our status as a quality operator. It’s important to continue to seize the opportunities out there for growth. For example, we’ve recently put our staff through disability awareness training and we’re having our menus printed in large font. Becoming a destination that caters for customers with access needs is a big priority for us going forward.

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